I love the end of the year! It gives me an opportunity to review the past year — the good, the bad and the ugly — and resolve to make some changes that will improve the quality of my life. It also allows me to determine what has worked well and reward myself handsomely for victories, both big and small. I really only began to set goals about three years ago, when I felt that I wasn’t moving forward, and it has been life changing. It’s tough to arrive when you don’t know where you are headed!

What do you want to see happen this year? How will you get there? What habits need to be broken in order to achieve success? Write the answers to these questions down and review them. We all deserve the very best that life has to offer, so begin to define what your ideal life looks like, and get excited about it! Abundance comes in so many forms, so ensure your goal-setting includes both personal and business goals, and is broken down into short-, mid- and long-term.

So, you’ve written down your goals and have identified some habits you wish to break. Let’s roll up our sleeves and look at some common habits that people engage in that sabotage their financial health, and discuss how we can best overcome them. Which of these do you engage in?

1) Not paying yourself first. As a general rule, we should be setting aside 10% of our income for savings. Canadians are not accomplishing this. In fact, according to the most recent data, Canada’s saving rate is 1.6% below the United States’ 5.8%, at 4.2%. That means that, on average, Canadians are spending nearly 96% of their after-tax income. Instead of looking at this as saving 10%, I look at the fact that I get to keep 90% of my income! The simplest way to accomplish this is to set up automatic deductions from your chequing account on a monthly basis. You will be amazed at how quickly that account will grow!!

2) Carrying high-interest credit card debt. A study was recently released showing that the average Canadian consumer carries a significant debt load. According to the study, the average credit card balance is $6,938. Most recent statistics show that the average Canadian has over $26,000 in non-mortgage debt! While some debt can make sense, carrying credit card balances on cards that can carry an interest rate of up to 28% is never a good idea. Unfortunately, 40% of Canadians do not have a plan in place to reduce or eliminate their debt. Review your debts and look at the interest rates being charged on each. If there are a lot of cards, often a consolidation loan to combine them into one loan at a reduced interest rate can put a period on this type of debt. Talk to your advisor to assist you in creating a plan to eliminate the debt over a specific period of time. Focus on paying down cards with the highest interest rates first. Make a plan and stick to it.

3) Spending money without tracking it. Do you know how much money you spend every month?Apparently, almost one third of Canadians spend more than they earn, so clearly, many of us don’t. Often this is just a matter of inattention. Numerous credit cards, lines of credit, and overdraft protection allow us to spend money without noticing —that is, until the bill comes in. Track your spending for one month. You will likely be astonished at the amount of money that is spent frivolously. This exercise will help to make you more conscious of your spending, and many people find paying themselves a weekly allowance can work really well too!

4) Not having a plan in place for emergencies. What happens if you suddenly need a few thousand dollars for a home repair? Where will the funds come from? What happens if you get sick and can’t work? How will you pay your monthly bills, and how much would you need? If you passed away tomorrow, would your family be able to maintain their lifestyle? If you are unable to answer any of these questions, it’s time to sit down with an advisor to ensure this area is covered. The best savings plans in the world can be eliminated in the blink of an eye should illness, emergency or premature death strike.

If you can identify with of any of the above habits, you are not alone. Take heart in the fact that you can make a decision to change anything at any time! How about now? If you are on track, congratulations. Perhaps this year you can stretch yourself a bit further, and sock away a little more than last year … remember that every little bit helps!

I wish you much health, wealth, love, joy and success in 2013! Now get out there and create your ideal life!

About the Author(s)

Brenda Hiscock is a Certified Financial Planner, with a specialty designation in Critical Illness, Disability and Long Term Care Insurance. She works closely with individuals and business owners to help them to define and achieve their financial goals. She can reached at Brenda@guilfoylefinancial.com.